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Bright Spots

Dating Sites Still Attracting Users

Paid Subscriptions Up, but OK Cupid, Other Free Options Growing Rapidly

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NEW YORK (AdAge.com) -- Love conquers all -- even, it seems, the recession.

Despite all the job losses and mounting debt, love -- or the quest for it -- is as alive as ever, particularly when it comes to online dating.

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"I don't know if any business is recession-proof," said Sam Sebastian, director of classifieds and local advertising at Google. "But this is one that happens to be doing very well."

Of the 100 million single Americans out there, some 20 million use online-dating sites, Mr. Sebastian said. And between July and December 2008, the number of searches on Google for words related to online dating surged an average of 20% from the same time period in 2007.

As it turns out, the subscription-based titans of online dating, IAC's Match and eHarmony, are not as vulnerable to social networks as once feared. But the big share gainers are free, ad-supported sites.

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According to year-over-year data from analytics firm Compete, in January, the number of unique visitors at Match was down 13% to 5.8 million. And while eHarmony was up 14% to 4.9 million visitors during that time, free sites OK Cupid and Plenty of Fish rose 104% to 1 million and 59% to 3.5 million, respectively.

Of course, free sites aren't hitting the big money yet. Last year, Match brought in more than $365 million, a 5% increase from 2007. EHarmony.com brought in close to $200 million. Plenty of Fish founder Markus Frind put revenue for 2008 at $10 million, and founder and co-CEO of OK Cupid Sam Yagan just said his company brought in a "seven-figure" number.

Subscriptions, not ads, are bringing in the money now. Fees for Match and eHarmony range from $20 to $60 a month; the more months users commit to the site, the cheaper the monthly cost. According to online-dating-industry consultant Dave Evans, the average online dater pays $100 and stays with a site for four months, contributing to a $1 billion industry. Match had 1.3 million paying subscribers as of its fourth-quarter report (eHarmony is privately held and declined to share its information).

But it's getting increasingly difficult to increase these numbers. Match, for one, has spent more than $180 million in measured media in the past three years, according to TNS Media Intelligence, but has increased its paid-subscriber base from only 1.2 million to 1.3 million.

That high subscriber-acquisition cost leaves the door open for free sites such as OKCupid to undercut the market. Mr. Yagan refers to his site as an "online bar" where visitors can enter freely, socialize with friends, and size up their potential mates by answering questions and completing personality quizzes developed by the company alone or in conjunction with marketers. As his site grows, Mr. Yagan said, he expects to command premium CPMs.

Since September, the site has brought onboard ChapStick, Colgate-Palmolive and TV network ABC as clients and is working with them to develop branded content. ChapStick, for example, hosted a popular "Kissing Test" that informed test-takers about how their kissing styles fared with those of others on the site.

Plenty of Fish's Mr. Frind said just over 50% of his ad sales come from marketers he negotiates with directly and the rest come from Google AdSense. He said that works for him, because Match subscribers then talk up his free site. "It's basically free advertising for me, and I get paid."

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